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How do you monitor performance and capacity in a virtual environment?

How do you monitor performance and capacity in a virtual environment? I don't want to make educated guesses, and need to be able to demonstrate what we are getting for our virtualization investment in a comprehensive manner. What tools are available to make this task easier?

You can use vSphere's performance tab. The problem is that you basically get a bunch of graphs and charts that are hard to correlate. There are third party monitors available that take care of metrics analysis for you by using mathematical models to make sense of the data and removing guessing from virtual performance and capacity management. A few different options are available from different vendors. Some of the better known include Veeam Monitor and VMware vCOPS. Either of them should help you create a better working environment for virtual machines.